Billions of dollars are flowing into artificial-intelligence technology, which helped superstar stocks like Nvidia lead the market for years.
But questions are rising about whether those stock prices shot too high and whether customers will get a good-enough return on AI investments through bigger profits and productivity. Worries are also weighing on companies that are borrowing lots of money to pay for AI investments.
Oracle and Broadcom have been at the centre of such worries recently, and their stock prices have been falling sharply since last week despite both reporting better profits for the latest quarter than analysts expected. On Thursday, Oracle rose 2.1 per cent, and Broadcom added 0.3 per cent.
Nvidia, the chip company that’s become Wall Street’s most influential because of its immense size, gained 2.7 per cent.
Another winner was Trump Media & Technology Group, which jumped 34 per cent to carve into some of its steep loss for the year so far, 69.3 per cent coming into the day. The company, which began with President Donald Trump’s Truth Social platform and then moved into cryptocurrencies and various other lines of business, is now moving into nuclear power.
It’s merging with TAE Technologies in an all-stock deal, and each company will own roughy half of the combined business. The companies said the deal would pair TMTG’s ability to raise significant money by attracting investors with TAE’s technology. They hope to get TAE’s nuclear-fusion reactors, which would create power in a similar way as the sun does, running commercially.
Cintas rose 0.9 per cent after the provider of work uniforms and cleaning supplies reported stronger profit for the latest quarter than analysts expected, while also announcing a program to send up to $US1 billion ($1.5 billion) to shareholders by buying back its own stock.
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Darden Restaurants, the company behind Olive Garden and LongHorn Steakhouse, rose 0.9 per cent even though its profit for the latest quarter fell short of analysts’ expectations. Its growth in revenue topped forecasts, benefiting from both the opening of new restaurants and increased revenue at its older locations.
CarMax swung sharply between gains and losses and was most recently down 0.7 per cent. The auto retailer reported a stronger profit for the latest quarter than analysts expected. But it also said it may make less profit from each $US1 of revenue in sales of used autos during the current quarter, as it tries to get more competitive in the market. It also plans to increase spending on marketing to drive customers to lots.
In stock markets abroad, indexes rose 0.3 per cent in London, 0.5 per cent in France and 0.5 per cent in Germany after the Bank of England cut its key interest rate and the European Central Bank kept its steady.
Asian indexes were mixed, with stocks falling 1.5 per cent in South Korea but adding 0.2 per cent in Shanghai.
In the bond market, Treasury yields sank following the encouraging report on US inflation.
The yield on the 10-year Treasury fell to 4.11 per cent from 4.16 per cent late on Wednesday.
AP
